Korus FTA a first stepA free trade agreement with the United States is an inescapable choice for us since we are heavily dependent on trade. We should approve the agreement not because Washington is pushing us to do so but because it will benefit our country.
Countries all over the world are forming blocs through free trade agreements. More than half of the trade in the world is managed by free trade accords. If a country does not fit in, it naturally becomes isolated.
Korea has a small domestic market and few natural resources. We spend around $70 billion annually to import energy materials, including oil. Trade accounts for 70 percent of our economy. In both the United States and Japan, that number is 22 percent.
We need to sell our products to other countries to make money and survive. Besides, Brazil, Russia, India and China are gaining on us in terms of economic growth at a frightening speed.
A two-way trade pact between Korea and the United States would serve as a breakthrough for our troubled economy. We sell 13 percent of our exports to the United States, the world’s largest and most advanced market. The monetary value of the United States’ imports accounts for 22 percent of the global import market, larger than the figure of China, Japan and the Association of South East Asian Nations combined. However, Korean products’ market share in the United States has dropped from 3.3 percent to 2.6 percent over the past 10 years. During the same period, Chinese products’ market share has increased from 6 percent to 15 percent. We need a breakthrough, and a free trade accord with Washington will certainly offer a lead to one.
Not only exports will increase, but trade disputes with Washington will also decrease, creating an atmosphere that increases direct investment. As we open our doors wider, domestic industries will boost their competitiveness and find a new growth engine.
We can expect regulation reforms, which are hard to expect in ordinary times. All these will lead to economic growth and creation of jobs, which is the right way to resolve social polarization.
In the global market, some criticize us for being very exclusive and say we use government subsidies and collusion to create a playing field for our own advantage.
If we sign a free trade agreement with Washington, thus clearing our image and building trust with other countries, it will be much easier to form free trade agreements with other countries in the future.